Destination Colombia: The Importance of International Experience in this Emerging Market

Ellen McMahon, EdD

Thursday, October 02, 2014

Did you know 70 percent of the world’s purchasing power is located outside the United States? According to the U.S. Department of Commerce, due to the increase in access through improvements in trade finance and the Internet, American companies have an opportunity to drive global market share, increase profitability and gain a competitive advantage. At a time when international business practices are continuing to grow and evolve, Lake Forest Graduate School of Management (LFGSM) wants students to experience this evolution first-hand.

Every year as part of our Global Focus Program, LFGSM faculty and staff select international locations that will equip students with meaningful, on-the-ground perspective of the business, political and social climates within four different countries. This year, one of those places is Bogota, Colombia.

Referred to as one of the two Latin American “Tigers”, Colombia has steadily built infrastructure, education and business environments that support economic growth. A key indicator of domestic change and organization is the emergence of the middle class. This group is proving to be a low-debt bearing cross section of consumers who appear to be motivated to build and expand within the international economy. LFGSM targets countries with growing global middle classes because they present more opportunities for companies in the U.S.

There are also several economic indicators of growth that led us to selecting Colombia:

1. Colombia’s Real GDP has grown approximately 12 percent over the last three years, continuing nearly a decade of solid economic development

2. Colombia has had a Free Trade Agreement (FTA) with the U.S. since May 2012

3. The major ratings agencies have upgraded Colombia’s government debt to investment grade

4. Colombia is a major exporter of energy and coal, and is actively searching for more diverse economic development

According to the World Bank’s Doing Business Report, Colombia is the third most “Business Friendly” country in Latin America and the top reformer in the region. The country also ranks fifth in the world and first in Latin America in terms of investor protection. The Embassy of Colombia in Washington D.C. predicted the country to have implemented FTAs with 49 countries this year, gaining preferential access to 1.5 billion consumers worldwide. However, the U.S. continues to be the most important destination for Colombian exports.

This country’s economy has been growing steadily and faster than the Latin American average and is quickly becoming one of the world’s leading emerging economies. From an academic perspective, building cultural and global competence in a business climate such as this will give students a professional edge that will continue to be in demand. The skills learned on-site and in-country allows for better communication, collaboration and are transferable to other initiatives within a company.

Learn more about our Global Focus opportunity in Bogota, Colombia on our website.

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